By William Booth
Washington Post Foreign Service
Sunday, April 26, 2009

These are not happy hours for the world's winemakers. The real estate slump has slapped the smug out of California's Napa Valley. Global sales of French champagne are flat; the Italians are drowning in unsold Chianti Classico. There is a grape glut in Chile, a fire sale in South Africa. Even the Australians are drinking less chardonnay.

Now try selling Mexican wine. In a war zone.

For many imbibers, the words "Mexico" and "wine" go together like cheddar and flounder: They don't. According to surveys done for producers here, even connoisseurs admit they are surprised to learn that Mexico makes wine -- let alone drinkable wine -- but it does.

"The climate, the soil, the place is perfect for wine," said vintner Hugo D'Acosta, whose family farm bottles a crisp $20 table white at its Casa de Piedra winery, an hour's drive south of the border. "Unfortunately, there are the other challenges."

Those challenges include the fact that Mexico's wine country is located just south of Tijuana, a hot spot in Mexico's vicious drug war, which last year claimed the lives of more than 725 people in Baja California alone. While the wine country has been relatively calm, Americans heading down for a visit must pass through Tijuana and Rosarito, scenes of daylight firefights, headless torsos and a spider web of military checkpoints. At the nearby beach town of La Mision, Mexican authorities in January arrested Santiago Meza López, a.k.a. El Pozolero (the Stewmaker), who confessed to using caustic soda to dissolve the bodies of 300 enemies executed by a local drug-smuggling cartel. Last week, a Rosarito Beach police officer was found with his head cut off. Late Monday, authorities discovered a corpse dumped on the outskirts of Tijuana. The body was on fire.

The drug war has had many casualties. Tourism has flatlined in Tijuana. Oscar Jesús Escobedo, Baja California's tourism secretary, estimates that 800,000 potential visitors decided not to come to the state last year because of the violence. Fancy beach resorts, started during the real estate boom, stand as half-built skeletons along the Pacific Coast highway, including the luxury hotel-condo Trump Baja, which went bust. In addition to the drug violence, a February travel advisory by the U.S. State Department noted that "robberies, homicides, petty thefts, and carjackings have all increased over the last year across Mexico generally, with notable spikes in Tijuana and northern Baja California."

Yet there is a small, growing and, until now, flourishing wine-producing region in Baja California, which cradles a bucolic valley of deep granite soils, with warm, sunny days and nights cooled by the nearby Pacific -- ideal conditions for making reds and whites. The vintners here were hoping their little valley could be the next magnet for wine nuts.

"Many Americans have told me this was the best-kept secret in the wine world," said Hans Backhoff, a co-founder of Monte Xanic and one of the area's leading vintners.

But the Americans are staying away. "In all my life, security has never been so bad," Backhoff said. "Not here, but to the north. The guy from San Diego? He's not coming anymore. We haven't seen that many American tourists recently."

Soon after the Spanish conquest, the missionaries planted vines and casked wine in Baja California. Later, pacifist Russians fleeing service in the czarist army immigrated here and also made wine. Then came Mexicans like Backhoff, who grew up in nearby Ensenada and began growing grapes in the 1980s.

Wine production peaked here two decades ago at 4 million cases. The region sells about 1.5 million cases a year now, almost all of it for consumption in Mexico. Although there is less wine than there used to be, the quality is generally higher.

In recent years, American and Mexican tourists discovered the region, and wine writers, perhaps after a few too many glasses of Backhoff's cabernet franc, began comparing it to Napa Valley in the old days. The Mexican government promoted the area, with its pretty wineries set amid postcard-perfect rows of grapevines, posting "Ruta del Vino" signs and supporting a seasonal wine festival that drew 30,000 visitors last year. Alongside the RV parks and taco vendors, there are now a couple of premier bed-and-breakfast resorts and at least one destination restaurant. Yet there is also plenty of rural squalor. Washboard dirt roads lead to the vineyards, and visitors are warned not to drive after dark.

"The violence has been bad for business, at our store in town and for the tours at the winery," said Mayra Sanchez, public relations coordinator for Casa Pedro Domecq, which cranks out 400,000 cases of wine a year. "It has been bad because the Americans don't want to come to Mexico, to cross through Tijuana. In the rest of Mexico, with our distribution networks, business is good. But here in the valley, not good."

The challenges to the industry are not limited to the drug war and the global economic crisis. "Mexico is a beer-and-tequila country," D'Acosta said. "Mexico is not a wine country. Even in the beginning, the Spanish drank some, but not much. They used wine in the churches, wine for the sacrament, but never really much. My generation never drank wine. Not at all. But then, very slowly, things started to change."

As D'Acosta sees it, the wine business in Baja California represents "the new Mexico," a dynamic country that is part of the larger world. That is the market the region's 35 wineries are seeking. In fact, very little Mexican wine is exported, and with walk-in sales dropping in the valley, most of the high-end wine is sold to the beach resorts in Cancun and Cabo San Lucas and to the pricey restaurants in Monterrey, Acapulco and Mexico City.

"When I started, no wines from Mexico were on the wine lists. They were, like, 'Lock the door, forget it, go away,' " D'Acosta said. "Now, if you open a high-level restaurant in Mexico City, you must serve Mexican wine." He takes a long view of the current violence and its impact on his business. "If you're going to be in wine, it's a decision for the life. To have five, six, seven bad years? That is normal. If we make good wine, they'll keep drinking it."

Steve Dryden, an American wine writer who leads tasting tours through the region and is opening his own wine bar in Ensenada, said he is as busy as ever.

"Some people don't pay attention to all the bad news," he said. "Once you get past the Tijuana-Rosarita corridor, you're quite safe. If you read the papers, you'd think they're killing hundreds of Americans a day."

The challenge, according to Dryden, is not cartel violence, but ignorance. "Most people don't even know Mexico makes wine," he said. "But the word is getting out." He describes a delicious grenache made by the Vinedos Malagon winery, which a reviewer from Wine Spectator magazine loved.